Ten-year back under 5%.

The 10-year Treasury yield closed Thursday at 4.96%, from 5.13% on Wednesday, on Treasury's 3:30 p.m. par curve. The 2-year fell to 4.65% from 4.81%. The 30-year fell to 5.29% from 5.42%. Reuters said the 10-year was on track for its largest one-day decline since March 10, 2023. On the same Treasury curve the 10-year had closed at 5.31% on Oct. 5, the high of the month; Reuters said the yield had risen to 5.3645% on Oct. 7, the highest since April 2002.

The bid came out of the stock market. Meta's third-quarter report, released Wednesday, showed $34.91 billion of capital expenditures in the quarter, a full-year range narrowed to $135 billion to $145 billion, and free cash flow of negative $2.12 billion. The company also announced a publicly listed, non-voting Class C stock, due to take effect in January 2027, which the release says "will provide Meta the ability to finance its growth." Meta shares fell 6.98% on Thursday. The Nasdaq Composite lost 2.6% and the S&P 500 fell 1.2%.

The other story did not go away. Brent for December settled at $113.17 a barrel, up about 4%, and WTI at $99.47, up 2.4%, after a drone strike on Saudi Aramco's Shaybah field killed two people and an attack hit King Fahd International Airport in Dammam. Bloomberg reported that operations were unaffected; Reuters reported that Aramco ordered the evacuation of its Dhahran headquarters. Oil at these levels is the case for higher rates. On Thursday the bond market set that case aside for a day.

The front end carries the policy part. The Fed's target range has been 3.75% to 4.00% since Sept. 17, and the effective rate printed 3.88% on Thursday. A 2-year at 4.65% still sits above the top of that range; by this issue's reading, some further tightening remains in the price, though less than a day earlier. Reuters, citing CME's FedWatch tool, put the odds of a hike of at least 25 basis points at the Oct. 27-28 meeting at 7.2%, from 27.7% a week before and 55.4% a month before. The committee is in its blackout period until the day after the meeting.

Thursday's data cut the other way. Initial jobless claims fell 6,000 to 194,000 in the week ended Oct. 17, the Labor Department said, with the four-week average at 197,750. Treasury sold $26 billion of 5-year TIPS at 1 p.m. Analysts at BMO Capital Markets, Reuters reported, saw the result as solid, with non-dealer bidders taking 94.5% against a 90.8% average over the previous six. A firm claims print and a clean inflation-linked auction on the day yields fell this far points to equities as the driver, with the economy holding up. That is this issue's reading, and Friday tests it.

The move ran from the 2-year out to the 10-year. The 5-year fell 17 basis points to 4.78% from 4.95%. The 3-month bill barely moved, 4.22% from 4.25%. The 2s10s spread is 31 basis points, from 32 on Wednesday. If stocks steady on Friday, the likelier reading is that oil and next week's meeting take the tape back. If they do not, Thursday's close may prove a waypoint, with more room for the curve to fall.